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2023 Supreme(Bom) 888
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S.Patel, Neela Gokhale, JJ.
Ador Welding Limited – Appellant
Versus
Union Of India & Ors. – Respondents
Writ Petition (L) No. 28446 of 2022
Decided On : 20-02-2023
Anjali Chandurkar, Advocate, Prakash Shah, Advocate, Durgaprasad Poojari, Advocate, Arjun Gupta, Advocate
Administrative actions must provide reasons in the order itself, and the lack of reasons violates constitutional principles and administrative law.
Headnote:
Bureau of Indian Standards - Rejection of Compounding Application - Bureau of Indian Standards Act 2016 - BIS Rules 2018 - Rule 50(4)
Fact of the Case:
The Petitioner's application for compounding under the Bureau of Indian Standards (BIS) Rules 2018 was rejected by the 3rd Respondent, leading to the challenge in the court.
Finding of the Court:
The court found that the impugned order lacked reasons and violated administrative law principles, leading to its quashing and setting aside. The court directed the release of the seized goods for export.
Issues: The issues revolved around the rejection of the compounding application, lack of reasons in the impugned order, and the violation of administrative law principles.
Ratio Decidendi: The court held that administrative actions must provide reasons in the order itself, and the lack of reasons violates constitutional principles and administrative law. The court also emphasized the need for compliance with the BIS Act for releasing goods into the Indian market.
Final Decision: The impugned order was quashed and set aside, and the seized goods were directed to be released for export. No costs were awarded, and the order did not affect the ongoing prosecution.
JUDGMENT
Gs Patel, J. - There is an Affidavit in Reply. Rule, returnable forthwith.
2. The Petition challenges a communication dated 26th August 2022 by which the 3rd Respondent rejected the Petitioner's application for compounding under the Bureau of Indian Standards (BIS) Rules 2018 ('the BIS Rules') framed under the Bureau of Indian Standards Act 2016 ('the BIS Act').
3. The facts are not contentious. The Petitioner manufactures welding equipment and welding automation solutions. Where applicable, i.e., for domestic sales, the Petitioner says that it complies with standards set by the Bureau of Indian Standards ('BIS').
4. The Petitioner has a manufacturing unit at Silvassa and a warehouse at Bhiwandi. The Petitioner imports welding wires- Flux Cored Wire E71T-1C Diameter 1.2mm. These go through an in-house quality check and then they are sold directly as imported goods.
5. Before the Flux Cored (Tubular) Electrodes (Quality Control) Order 2021 issued on 12th March 2021, these goods did not require a BIS certification. That order came into effect from 1st September 2021.
6. On a complaint that the Petitioner was importing these goods by misusing a BIS standard or not adhering to a BIS standard, the Scientist 'E' of the BIS by a letter of 22nd March 2022 authorised an investigation and search of the Bhiwandi warehouse. A search and seizure operation followed on 23rd February 2022. A total of 17703 goods were seized on that date.
7. By 9th March 2022, the Petitioner filed an application for composition of the offence under sub-rule (2) of Rule 50 of the BIS Rules with the 3rd Respondent. This application sought a release of the goods after compounding was allowed.
8. A copy of order in question is at pages 18 to 19 of the compilation given to us. The relevant Rules are also compiled at pages 14 to 17 of that volume. Rule 50 is specifically in relation to compounding of offences. There is no dispute that this was a first alleged offence. The procedure requires an opportunity and the stating of reasons. The proviso says that compounding cannot be granted for the asking. The last proviso of sub-rule 4 of Rule 50 says that no compounding is to be allowed where there are 'apparent contradictions, inconsistencies or incompleteness' in the application.
9. The Petition goes on to say that the Petitioner's Chartered Accountant certified the assessable value of the goods to be INR 3,35,83,210/- and certified details of the imports made by the Petitioner. All details were provided. The 3rd Respondent sought further details. These were also furnished. A Video Conferencing hearing took place on 9th June 2022. The Petitioner submitted that Flux Cored Wire is a generic name. The 2021 Quality Control Order is for a specific type of Flux Cored Wire namely, Tubular Flux Cored Wire conforming to IS-15769:2008 specification and not universally applicable to all Flux Cored Wires. The Customs Authorities have in fact withheld certain trans-shipments because of this generic name but these were allowed to be released.
10. By an email of 14th June 2022, the Petitioner submitted further details. There was no further action. The Petitioner sent reminders on 14th and 21st July 2022. Then on 23rd July 2022, the Petitioner sought permission to export the goods, i.e., not release them in Indian market. To this also there was no reply and a reminder had to be sent on 9th August 2022. The only response was the impugned order of 26th August 2022. A copy is at Exhibit 'A'.
11. It makes for the most curious reading. It contains absolutely no reasons. It has a recitation of the history and certain figures. Presumably the finding, or what is supposed to pass for it, is to be found in paragraph 10. This, in sub-paragraphs (i) to (vii) only recites what has happened. Sub-paragraph (iv) overstates an undisputed fact that the seized material does not bear the BIS standard mark. Of course it does not. If it did, this entire Petition and everything before it would be unnecessary.
